We consider the efficiency implications of policies to reduce global carbon emissions in a
world with pre-existing tax distortions. We first note that the weak double dividend, the
proposition that the welfare improvement from a tax reform where environmental taxes are
used to lower distorting taxes must be greater than the welfare improvement from a reform
where the environmental taxes are returned in a lump sum fashion, need not hold in a world
with multiple distortions. We then present a large-scale computable general equilibrium …